Under the new Companies Act 2013, the Ministry of Corporate Affairs has mandated the procedure for the incorporation of company in India.
In this article, we will share the step-by-step process and information about the documents required for the incorporation of company in India.
There are two forms of companies: Private and Public.
In this article, we will focus on private company incorporation, as per the new companies act 2013.
Besides the documents required, we will also share pvt limited company registration fees and director identification number meaning, which is confusing for new business owners.
Step-By-Step Process for Incorporation of Company in India
Step 1: Reservation of Company’s Name Under RUN or Spice
The first and foremost step in the company registration process is reserving the name of the company.
There are two ways to go for it: RUN and Spice. RUN or Reserve Unique Name is a web form in the website of the Ministry of Corporate Affairs, wherein applicants can check if their new business name is available or not and then apply for a desirable name for the company.
The applicants must provide two names in preferential order and must follow all the norms of the ^naming convention.
Once MCA approves a company name, it’s reserved for 20 days within which the applicant must complete all the remaining steps required for company registration. You can visit the RUN web service by the Ministry of Corporate Affairs here.
MCA checks three important factors while approving the company name:
- The name should be unique, and no other company (public or private) should be using that name.
- The name shouldn’t be offensive.
- The name shouldn’t give an impression that it’s linked with the Govt.
Filling the Spice-32 form is another way to finalize the name, but you can give only one option and if it’s rejected, you will need to redo all documentation again.
The applicant must also select the names of the Directors of the company. For a private limited company, at least two names of the Directors need to be provided.
Step 2: Procuring Digital Signature Certificate
Once the company name has been approved by MCA and registered, the next step is procuring a Digital Signature Certificate for your private limited company.
Digital Signature Certificate is a form of a digital key, which holds all the vital information about the registered signatory like name, address, email, phone number, and the authority which has provided the certificate.
Digital Signature for a registered company enables the authorized signatory to prove its identity and sign documents electronically. For e-Filing, Digital Signature Certificate is a mandatory requirement.
For obtaining a Digital Signature Certificate, the applicant needs to contact any one of the authorized agencies approved by Govt for the same:
IDRBT Certifying Authority (https://idrbtca.org.in/)
Code Solutions (https://www.ncodesolutions.com/)
Tata Consultancy service and National Informatics Center (https://nicca.nic.in/)
Step 3: Applying for Director Identification Number or DIN
Director Identification Number or DIN is the unique identification number for Directors of a registered company. Only once DIN is approved, the corporation documents can be filed under Registrar Form No.-DIR-3.
Note here, that the name approval process for the company can be filed before applying for DIN, and there is a fee of Rs 500 for this process, and it takes seven days for DIN to be activated and approved.
Step 4: Writing Memorandum of Association (MoA)
Under Section-4(6) of The Companies Act, 2013, Memorandum of Association or MoA must be in a respective form prescribed in Table A, B, C, D and E of Schedule-I.
MoA is like the Constitution of the Company: It will highlight all the fundamental information about the company, its stakeholders, directors, and their relationship with the company. The objective of the company, liabilities associated, the state in which the company is operating, and more information are presented in this document.
Step 5: Writing Articles of Association (AoA)
Articles of Association or AoA is the document that enlists the purpose of the company, how its business will operate, how its Directors have been appointed, and more.
Learn more about – What Is MOA And AOA: Know the Objectives & Difference Between AOA and MOA?
Step 6: Application for the Incorporation of Company
Once all these documents are ready and completed, the applicant may file for the incorporation of company, and under Section 7 of the Companies Act 2013, the application needs to be filed with the registrar under whose jurisdiction the company’s address is located.
The application for company registration can be made via e-Form SPICe accompanied by SPICe MOA and AOA.
Once the due procedures are completed, the Registrar of Companies grants a Certificate of Incorporation, which is evidence of the company’s existence.
The certificate of incorporation of a private limited company has this 3 critical information:
- Company Identification Number
- Director Identification Number
The list of documents required for the incorporation of company includes an Aadhaar card, PAN Card, address proof, digital signature certificate attested by the applicants.
Pvt Limited Company Registration Fees
Pvt. Ltd. company registration cost is zero if the company is small. In 2019, the Govt of India waived off the registration fees for new companies which are incorporating under the private limited category.
This waiver of registration fees is applicable only for those private limited companies whose authorized capital is less than Rs 15 lakh. Only stamp duty needs to be paid in such a case. However, such small companies availing fee waivers for registration cannot raise any capital till one year.
Registration fees for a private limited company with more than Rs 15 lakh capital and less than Rs 50 lakh capital are Rs 2000. If it’s not a small company, then registration fees are Rs 36,000.
Don’t get overwhelmed when it comes to understanding the procedure for the incorporation of company in India! We at MSMEx advisory platform are here to provide you with expert guidance and mentorship.